He said that this careless “shoveling” of money could lead to a default here in the U.S.— and suggested that the first default will be on our payments to the IMF.

Overall, Stockman doesn’t think much of the IMF or what the rescue attempts of the PIIGs are doing in Europe. Lapin again:

We’re doomed on both sides of the pond, he told me on the set of “Worldwide Exchange,” and he didn’t hold back in name-calling the “lunatics” responsible for our global fiscal mess—especially the EU and the IMF.

In Europe, Stockman raged against a dichotomy of tax and debt slavery created by the EU: “They’re attempting to go turn the prudent Europeans of the north into permanent tax slaves in order to bail out the big banks in France and Germany and elsewhere who don’t deserve a bailout,” he said, adding that, “In order to accomplish that, they will attempt to turn the millions the of people who live in southern Europe into permanent debt slaves in order to pay the piper from the guarantees coming from the north.”…“The IMF is an absurd institution,” he said. “It’s destructive. It’s the source of holding this whole thing together with bailing wire.”

“And the sooner their number is called, he said, “The better off I think we’ll all be.”

What does he think of the U.S. situation? He told Lapin:

First off, as an investor, he’s short bonds and warned me of “bond Armageddon,” where rates could potentially go up to five percent.

This is the second warning in the last seven days on the bond market. Greenspan also warned recently about the debt market. When these guys are in office serving the power elite, they rarely speak truth to the masses. But guys like Stockman and Greenspan are not dumb. They see what is coming and they know it is best to position themselves as wise seers. Do not take their warnings lightly. This is no time to be holding long-term bonds. As I have said many times, when interest rates start to climb, the climb will be fast and furious. Bernanke will attempt to suffocate the rate climb by printing more money, but this will only result in higher price inflation and an even higher price inflation premium built into interest rates.

Stockman is very correct that interest rates could climb 500 basis points very rapidly. In 2007, before the financial crisis hit, one-month Treasury bills traded as high as 5.24%, now they trade at 0.02%, so just getting us back to the pre-crisis period suggests a 500 basis point hike.